{"id":170671,"date":"2025-09-30T15:35:08","date_gmt":"2025-09-30T15:35:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/170671\/"},"modified":"2025-09-30T15:35:08","modified_gmt":"2025-09-30T15:35:08","slug":"price-inversion-in-the-housing-market-is-just-weird","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/170671\/","title":{"rendered":"Price inversion in the housing market is just… weird"},"content":{"rendered":"

Something strange has been happening in the housing market this year: for five straight months, as of the latest data released last week<\/a>, the median existing home price has exceeded the median new home price. It\u2019s a statistical oddity we\u2019ve seen rarely since tracking began more than half a century ago.<\/p>\n

With the possible exception of limited edition Birkin bags and Air Jordans, new things are generally more expensive than used things. <\/p>\n

A newly built house, for instance, has all the updated trends: \u201cYou know, white countertops and more, white and gray cabinets,\u201d said Nitin Gupta, a real estate agent in Dallas who mostly sells new homes. <\/p>\n

He said older homes often have stained carpet, windows that don\u2019t seal or a wheezy old HVAC system that\u2019s no match for the Lone Star state.<\/p>\n

\u201c[In] Texas, the air conditioning goes on 24 by seven,\u201d said Nitin.<\/p>\n

It\u2019s those differences that make this inversion in average prices weird, said Robert Dietz, chief economist at the National Association of Home Builders.<\/p>\n

\u201cWe saw it happen in 2021, which was on the upside of a growing market and before that, you know, the only other times that I can recall it occurring were in significant market downturns,\u201d said Dietz.<\/p>\n

He said elevated interest rates have led builders to aim smaller \u2014\u00a0more modest town homes than luxury five bedrooms. Plus, many are resorting to price cuts because an empty house is a drag on the bottom line.<\/p>\n

That\u2019s not really the case in the resale market, said Jessica Lautz, deputy chief economist at the National Realtors Association.<\/p>\n

\u201cExisting home sellers are just entrenched in their homes,\u201d she said. \u201cThey have no motivation to move from low interest rate mortgages.\u201d<\/p>\n

The number of existing homes on the market has been increasing from the historic lows of the last couple years, but about 20% of sales are still coming in over asking price, said Lautz. And some sellers are pulling their house off the market if offers are too low.<\/p>\n

\u201cIn fact, they’re willing to become accidental landlords and to hold on to those properties,\u201d she said.<\/p>\n

That could be pushing existing home prices higher. But there are also differences in where new homes are selling that throw the averages off, said Richard Green, a housing economist at the University of Southern California.<\/p>\n

Almost 70% of sales last month were in the South.<\/p>\n

\u201cThey are built in markets that typically have much lower house prices than New England, New York,\u201d said Green.<\/p>\n

Still the softness in new home prices could be a sign the whole market is turning, said Rick Palacios at John Burns Real Estate Consulting.<\/p>\n

\u201cHome builders experience it first and react,\u201d said Palacios. \u201cIt just takes a while longer to actually hit the resale market.\u201d<\/p>\n

He said the longer mortgage rates stay above 6%, the likelier it is that weakness will spread.<\/p>\n

Related Topics<\/p>\n","protected":false},"excerpt":{"rendered":"Something strange has been happening in the housing market this year: for five straight months, as of the…\n","protected":false},"author":2,"featured_media":170672,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[84,7547,76780,7548,4658,467,56,54,55],"class_list":{"0":"post-170671","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-home-builders","10":"tag-home-owners","11":"tag-home-prices","12":"tag-housing","13":"tag-markets","14":"tag-uk","15":"tag-united-kingdom","16":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/170671","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=170671"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/170671\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/170672"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=170671"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=170671"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=170671"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}